This paper analyses the impact of the introduction of a general, automatic labour subsidy in a regional economy, concentrating on employment effects. We adopt a computable general equilibrium (CGE) approach, using a model parameterised on data from a UK region, Scotland. Two particular issues are identified which have usually been neglected in previous work in this area: the impact of the fiscal injection associated with the subsidy and the qualitative and quantitative consequences of allowing the nature of the regional labour market to vary.
|Number of pages||28|
|Journal||Oxford Economic Papers|
|Publication status||Published - Jan 1996|
- regional economy
- computable general equilibrium